Inverted Hammer: Spot Bullish Reversals at Market Bottoms
What Is It:
Single-candle bullish reversal appearing at downtrend bottom. Small body at bottom, long upper shadow (2x body length), signaling buyer pressure building.
Pattern Psychology:
Buyers push price sharply higher during session but face selling resistance. Close near opening shows temporary weakness, but buying attempt signals trend exhaustion.
Shooting Star vs Inverted Hammer:
Identical structure, opposite contexts. Shooting Star at uptrend top warns bearish reversal; Inverted Hammer at downtrend bottom signals bullish reversal.
Final Candle – Trend Resumes A strong bullish candle forms and closes above the high of the first candle, confirming that buyers have regained control.
Boost Reliability:
High volume strengthens signal. Combine with RSI oversold (below 30), support levels, or bullish divergence for 65-75% accuracy before entering positions.